Federal authorities closure notice for the Silk Road Marketplace website.
Notice stating the closre of the Silk Road web site by US federal authorities.

The FBI has seized a stash of the virtual currency Bitcoin worth $28 million that allegedly belongs to the founder of the anonymous drugs trading website Silk Road.

Federal prosecutors in New York said that the 144,336 Bitcoins taken in the record haul belonged to Ross William Ulbricht, who used the online pseudonym Dread Pirate Roberts,

Ulbricht was arrested on 1 October in San Francisco, and charged with narcotics trafficking conspiracy, computer hacking conspiracy and money laundering conspiracy. He is expected to appear within weeks in Manhattan federal court.

The former physics postgraduate set up the Silk Road website in 2011, writing in an online forum that his mission in life was to "give people a first-hand experience of what it would be like to live in a world without the systemic use of force" by "institutions and governments".

The site rapidly became a thriving illicit marketplace, with 900,000 registered users trading in drugs and weapons, their identities shielded by the Tor network, an internet connection protocol that uses a multiple encryption process to ensure online anonymity.

Bitcoins rapidly became the standard currency on the Silk Road, as they can be traded untraceably.

Prosecutors claim they have found information linking Ulbricht to one of the biggest and busiest Bitcoin addresses, or wallets.

"This is his wallet," said an FBI official. "We seized this from Dread Pirate Roberts," one investigator told Forbes.

"This is unprecedented. Even if this were a regular drug case, it would be huge."

Following earlier raids, the FBI has now seized a total of $34.5 million in Bitcoins from the Silk Road.

The site supposedly generated sales of more than $1.2 billion before being shut down by authorities.

"From in or about January 2011, up to and including September 2013, the Silk Road Hidden Website... has served as an online marketplace where illegal drugs and other illicit goods and services have been regularly bought and sold by the site's users," state court papers filed in the Southern District of New York.

"The complainant further alleges, in part, that the Silk Road Hidden Website is designed to facilitate the illicit commerce hosted on the site by providing anonymity to its users, by operating on what is known as The Onion Router or Tor network... and by requiring all transactions to be paid in Bitcoins, an electronic currency designed to be as anonymous as cash."

Sarah Meiklejohn, a researcher at the University of California at San Diego who has studied the Silk Road and Bitcoin, told Forbes that deposits in the Bitcoin wallet allegedly belonging to Ulbricht could be tied to the Silk Road. "Addresses with 144,000 Bitcoins don't usually crop up overnight," she said.